Service Innovation based on the Japanese “O-motenashi Way” of Business

— S-D Logic Framework of Value Co-creation Validated on Two Case Studies —

Abstract

This study examines the Japanese “O-motenashi Way” of business with its use of high-context service interaction.Reflecting on the historical evolution of host-guest relationships in the traditional Japanese “Way of Tea”, we present a service-dominant (S-D) logic framework for analyzing value co-creation in the scope of three aspects: closeness of relationship with customers, empowerment of employees, and establishing trust with local communities. The framework is applied to understand the success of two businesses practicing the “O-motenashi Way”: prosthetics manufacturer Nakamura Brace, and high-grade traditional Japanese inn Kamenoi- Bessou. These case studies demonstrate the aforementioned three aspects of contemporary service business management as embodied in the “O-motenashi Way” of value co-creation. The framework provides a basis for effective strategic planning of service management not only in domestic businesses, but also in high-context service businesses aiming at future semi-globalization focusing on local cultural context.